Failure to Pay a Debt
If debts are not paid timely or within 60 days of the statement date demand (debt) notification letter (top right), the law requires that enforcement action be taken, which could include the following:
- Reporting the delinquency to commercial credit bureaus
- Referral to private collection agencies for collection assistance
- Salary offset
- Treasury Offset Program
We report to commercial credit bureaus when an account becomes delinquent. Accounts with no payments within 30 days of the initial demand (debt) notification letter are considered delinquent for payment purposes. We will report a delinquent account to the credit bureau if we do not receive a payment within 60 days of the date of the initial demand (debt) notification letter. We attempt to notify you using your last known mailing address. To ensure you receive timely communications, please update your mailing address with DFAS.
All delinquent accounts are reported as a "collection account" on the consumer credit report. The debt will remain as a collection account while on the credit bureau report; however, any subsequent payment activity is reported to the credit bureaus on a monthly basis. If you believe the information reported by the credit bureau is incorrect, contact the credit bureau.
Delinquent account information is reported to the following credit bureaus:
- Equifax - 888-378-4329
- Experian - 888-397-3742
- Trans Union - 800-916-8800
- Innovis - 800-540-2505
If you contact us once you pay your debt in full, we will ask the credit bureau to delete the debt from your credit file, which can take up to 90 days
The private collection agencies that provide collection assistance to DFAS and other federal agencies include:
- FedDebt - 888-826-3127
- CBE Group - 866-895-4766
- ConServe - 866-547-0501
- Pioneer Credit Recovery - 877-907-1820
Accounts that become delinquent are referred to the collection agencies through FedDebt. If you have been referred to a collection agency, please contact FedDebt directly for questions and assistance.
Accounts may be referred up to 2 times. Once an account has been referred to a collection agency, you must contact the collection agency directly to discuss all aspects of your account, including payment arrangements.
Treasury Offset Program
The Treasury Offset Program is a centralized debt collection program designed to assist agencies in the collection of delinquent debts owed to the Federal Government. The Treasury Offset Program uses this process to find means of payment for the debt. When a match occurs, the payment is intercepted and the debt is offset, or paid, up to the amount of the debt plus assessed administrative fees. Delinquent account information is reported to the Department of Treasury on accounts with no payments received within 60 days of the date of the initial demand (debt) notification letter. Under the Treasury Offset Program, Federal Income Tax refunds, federal salaries and other payment from government agencies can be used to pay delinquent debts.
Administrative offset is authorized from payment due to an individual from:
- Federal Income Tax Refunds - 100 percent of the remaining balance of the debt.
- Office of Personnel Management annuity payments - 25 percent of monthly disposable income.
- Social Security Administration payments - 15 percent of monthly disposable income.
- Non-Department of Defense Federal Salary Offset - 15 percent of monthly disposable income.
The federal salary offset process allows for collection of delinquent debts from individuals receiving federal salary from government agencies other than the Defense Department. The purpose of salary offset is to quickly allow the government to reduce the costs of debt collection.
When a person separates from the Armed Services, a post separation debt can occur. If a member re-enlists or is called back to duty with a delinquent out-of-service debt, our office may refer the remaining balance of the debt, in addition to any accrued interest, administrative, and penalty fees, to the member's current finance office for action. Involuntary salary offset is collected at two-thirds of the member's disposable net income. Involuntary salary offset against a member's pay may not exceed 15 percent of disposable pays, unless the individual provides written consent for deduction of a greater amount.
Retired Military Members:
The same applies to members who retire from military service and begin receiving retired pay. If a debt due the government becomes delinquent, it will be forwarded to DFAS- Retired Pay, for action. Involuntary salary offset against a member's retired pay is also collected at two-thirds of the member's disposable pay. Involuntary salary offset against a member's retired pay may not exceed 15 percent of disposable pays, unless the individual provides written consent for deduction of a greater amount.
Current DoD Civilian Employees:
A delinquent debt will be forwarded to an individual's current pay servicing office. Involuntary salary offset against a current Defense Department civilian employee may not exceed 15 percent of disposable pay, unless the individual provides written consent for deduction of a greater amount.
Make a Payment
We accept full and partial payments for out-of-service debts, including payments toward an installment agreement. Penalties and interest will continue to grow until you pay the full balance, for more information or to make a payment, visit Make a Payment.
Are You Out-of-Service and Need More Time to Pay or a Lower Amount?
Avoid a penalty by filing and paying your debt by the due date, even if you can’t pay the entire amount that you owe, visit Apply for a Reduced Payment.
Return to the Debt and Claims Homepage
Page updated: July 8, 2023